Forex riddle: China’s foreign reserves fall for 4 straight quarters

http://atimes.com/2015/07/forex-riddle-chinas-foreign-reserves-fall-for-4-straight-quarters/

Forex riddle: China’s foreign reserves fall for 4 straight quarters
By Asia Unhedged on July 31, 2015

China’s foreign exchange reserve has been falling for four consecutive quarters, the longest period since 1998, but economists and analysts don’t know why.

For the second quarter, the largest forex reserve in the world fell $36.2 billion to $3.69 trillion, down from a record high of $3.99 trillion in the same period a year ago, according to official data.

This follows the first quarter’s $113 billion decline in the central bank’s forex reserves. In the fourth quarter of 2014, the reserves fell $47.7 billion, following a $105.2 billion drop in the third quarter.

Many analysts say that foreign investors are pulling money out because they don’t have confidence in the economic outlook, said independent Chinese newsite Caixin. The rising US dollar isn’t helping either.